iPhone 5SE shows stronger appeal among laggards, switchers

While U.S. opening-weekend sales were puny compared to the iPhone 6S flagship last year, buyers were more likely to have held on to their previous phones for 2+ years

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Preliminary data from U.S. sales of Apple's new smaller iPhone 5SE suggested that the phone had strong appeal among purchasing laggards and those who had previously owned an Android or Windows smartphone, a market research firm said this week.

Online sales of the iPhone 5SE -- Apple's first 4-in. model since 2013 -- may have been a very small fraction of the opening weekend of its last flagship, 2015's iPhone 6S, but buyer demographics portrayed a group noticeably different than the stereotypical Apple customer.

According to Palo Alto, Calif.-based Slice Intelligence, U.S. buyers of the iPhone 5SE were more likely to have last purchased a phone more than two years ago than those who grabbed an iPhone 6S last fall.

While 40% of those who bought the iPhone 6S during its opening weekend of sales had gone without a new phone in the prior 24 months, 49% of iPhone 5SE buyers fit that description.

That's no surprise: If buyers were after a smaller device, as analysts concluded before the 5SE's unveiling, Apple had last offered them a choice between September 2013 and September 2014, the stretch when the iPhone 5S and 5C were sold as new.

Slice based its data on a sampling of approximately 4 million U.S. consumers. Those people have opted in to Slice's services or apps -- including the same-named shopper's assistant app for iOS and Android -- or those of partners which license the firm's technology, and so give Slice access to their email inboxes. Slice sniffs through the inboxes, then spots and copies emailed receipts for online orders.

The company's data on the iPhone 5SE also implied that a larger proportion of buyers had switched to Apple's ecosystem from a rival's than from the full-sized iPhone 6S, which boasts a 4.7-in. display.

About 16% of the 5SE's purchasers had bought a non-Apple -- read Android -- phone in the past two years, a measurable increase over the 10% of switchers who picked up an iPhone 6S last year during the model's opening weekend.

Again, that makes sense: Because the iPhone 5SE starts at $399 -- 39% less than the $649-and-up iPhone 6S -- it may have had a stronger appeal than another Android smartphone, which comes in a wider range of price tags, many of them much less than Apple's flagship phone. Google's 5.2-in. Nexus 5X, for instance, starts at $349.

Slice's data would have been more impressive if sales of the iPhone 5SE had been anywhere close to those of the iPhone 6S. But they were not.

When indexed against 2014's iPhone 6, Apple's first phone with a screen larger than 4 inches, the 5SE's debut-weekend online sales were just 3% of the benchmark. With 2015's 6S launch sales at just 54% of its predecessor, that meant the 5SE sales were only 5.5% of the iPhone 6S.

The iPhone 5SE's opportunities in mature markets like the U.S. are, in fact, limited, according to other researchers. Last week, Chicago-based Consumer Intelligence Research Partners (CIRP) estimated that Apple would sell just 4 million to 6 million iPhone 5SE phones in the coming year.

CIRP based its forecast on the current composition of the installed base of iPhones in the U.S., and the small number of consumers who switch from one OS ecosystem to another.

"We think that relatively few Android switchers and first-time phone buyers will opt to purchase the iPhone SE," said Mike Levin, co-founder of CIRP, in a March 22 statement.

Of course, Apple will sell the iPhone 5SE in markets other than the U.S.

Some analysts have speculated that the 5SE will do well overseas, particularly in places where Apple only has a small foothold, such as India.

"I believe the iPhone SE with its top-of-the-line components in an iconic industrial design and aggressive price is squarely aimed at technically savvy urban Indians," said Ben Thompson, an independent analyst, on his Stratechery website (subscription required) last week. "Yes, it's still expensive, and no, it's not competitive with sub-$100 Micromax or Xiaomi models, but it is an iPhone, and I think it's going to be a big deal [there]."


Copyright © 2016 IDG Communications, Inc.

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